CII lauds revised TN budget

The Confederation of Indian Industry (CII) has termed the revised budget for 2006-2007 announced by the Tamil Nadu government as progressive and welcomed the decision to implement Value Added Tax (VAT) from January 2007.

"The decision on VAT implementation is a move in the right direction and would do a lot to increase investors' confidence and help industries in Tamil Nadu increase competitiveness," said Sanjay Jayavarthanavelu, chairman of the state council of CII, in a press statement.

He further said that the budget had brought the much-needed clarity with regard to VAT, giving relief to manufacturers in the entry tax on raw materials and restoring tax exemption for some essential products.

The move to exempt from registration up to a threshold limit of Rs 10 lakh would also address the concerns of small traders, he said

Jayavarthanavelu said that the constitution of a special task force under the chairmanship of the chief minister to resolve the problems facing the industry and commerce was highly appreciable.

According to the press release, the emphasis on the agriculture sector in the budget was reflected in the increased outlay from Rs 855 crore to Rs 978 crore.

"The reduction of interest on crop loans from 9 percent to 7 percent and the establishment of a terminal market facility and agri loan facilities would definitely increase competitiveness of the agri sector as well as impact the farmer positively."

The CII statement further lauded the government's decision to encourage the cultivation of jatropha in wastelands, particularly in view of the fact that the country is looking to reduce the cost of oil imports.

Exemption of tax on computers manufactured by the industries with investments exceeding Rs 100 crore in special economic zones (SEZs) would bring in hardware investments to Tamil Nadu.

The proposal to establish a second tidal park in Chennai and a new one in Coimbatore would bring in significant investments to the state and in turn increase the possibility of export earnings and employment.

The exemption of Tamil software from sales tax is also a welcome step. "This, however, could have been extended to all the software" said the statement.

The proposal to add 750 megawatt in the current year and expedite the implementation of 2,000 megawatt and 1,000 megawatt Jayamkondam Lignite Project would boost the power sector in the State.

This, Jayavarthanavelu said, was in line with the CII recommendations on the need to augment power generation in the State to meet future demands and a recent meeting that CII had with the chief minister of Tamil Nadu. "The proposal to establish industrial corridor of excellence with state-of-the-art infrastructure facilities would further speed up the industrialisation in the state and attract large investments to the State."